Housing Prices Continue to Rise in Third Quarter of 2013

Newly released government data attests to the continued inflation of Israel's real estate bubble in the third quarter of 2013

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Tova Dvorin , 03/11/13 11:26

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The Chief Government Appraisal office published new data today (Sunday) that reveals a continued rise in real estate prices for the third quarter of 2013. The report is based on the price of a 4-room apartment, which is the most common housing arrangement currently in the real estate market.

Housing prices have increased by some 1.9% since last quarter in Israel's major urban centers, the report reveals, with the highest increase (5%) in Tel Aviv and Ashkelon. Kfar Saba and Petach Tikva have experienced no change in median housing prices; in Rehovot, Jerusalem, and Rishon LeTzion, average housing prices have decreased by 1 percentage point since last quarter.

The results are relatively low in comparison to housing increases during the 3rd quarter of 2012, where housing in Be'er Sheva rose 9%, and Jerusalem and Modi'in experienced a 2% increase. Increased housing prices in the South at that time may have been due to the extensive damage to residential areas during Operation Pillar of Defense, which started that month.

More than just demonstrating differences in the real estate market, the report also demonstrates the supply and demand ratio for housing in various cities across Israel, in correlation with the different types of housing available in those cities.

This quarter's report distinctly shows large increases in Israel's major cities -- Jerusalem, Tel Aviv, Be'er Sheva, and Haifa -- in the gap between the housing prices in wealthy neighborhoods versus in poverty-stricken areas for each city. Low rates of variation in Kfar Saba, Rehovot, and Modi'in may be due to the homogenous populations of these cities, which generally each cater to a particular socioeconomic class.